Jul. 27, 2021
Subject FILE NUMBER S7-23-20 VIA EMAIL Dear SEC, My name is Jim Rivest and I'm a retiree living in Florida. I already submitted 2 long-winded responses related to this subject last year, so this one will be much shorter. I just read the comments on the thread and while I invest in the OTC space, I don't know all the ins and outs like the professionals, lawyers, and broker-dealers commenting. My view will simply be that of a common man - a common-sensical retired investor who happens to sometimes find gold in the illiquid OTC space. I managed a deli for decades but have always been drawn to investment bargains and I have found them in OTC Land. I'm thrilled that an "Expert Market" has been proposed, but I'm worried that it won't be up and running in time. I think this new Expert Market should be established well before the compliance date goes into effect, but it looks like that won't be happening. In fact, I'm not even sure it will be established by the end of September. If that is the case, the compliance date should be extended until all the ducks are in order. I thought some gray market securities would be transitioning up to this new market, which would be great, but in fact, it's now possible that some of my very 'dark' holdings will now be moving down to the gray market if the Expert Market is not approved and functional in September. I have purchased securities on the gray market and sometimes it's the wild west. One time I was selling a security where there were no takers at my price, which was lower than the last trade. I then decided as an experiment to place a market sell order in a token amount of shares just to see what happened and it just sat there for 10 minutes before I decided to pull it before someone lowballed me. On another occasion, I decided to buy a gray market security at several brokers with different prices just to see how the brokers handled the trade. I placed the highest bid with Vanguard, but nothing happened, while the lower prices were filled at other brokers. I had to call Vanguard after a few days and they explained to me it was not an electronic market and they had to get on the phone with others to see what was available. After I called them, they did finally move and called others to see what was available for sale. I've already heard from some of my holdings (and these are real companies) that they will NOT be submitting financials to OTC Markets. I've heard from others who aren't sure what they are doing. I was on the Boston Sand and Gravel (BSND) call today and in answer to my question about submitting financials to OTC Markets, I was told they are taking it under advisement, it's an ongoing study and no decision has been made. They are not alone being on the fence, as I heard from others who said the same thing. Without a timely expert market, I'm not sure how we will trade these securities, as I've heard from several large brokers that the thousands of companies that don't comply will not be tradable at their firms. This week I was buying one of the OTC stocks on the restricted list that contained ~6K stock symbols. Brokers such as TDAmeritrade and Schwab will not let me buy this security in a few weeks because it's on this list. This company is not small, but trading is light. I bought it because it was selling at less than 4x adjusted earnings, less than tangible book value, and significantly less than replacement value. Such valuations are difficult if not impossible to find on the exchanges. So bottom-line, please establish the expert market soon or push back the September date. Also this expert market should be quasi-permanent until an even better solution is found, so no sunset provision is necessary. Thank You, Jim Rivest